Correlation Between Impax Environmental and Primary Health
Can any of the company-specific risk be diversified away by investing in both Impax Environmental and Primary Health at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Impax Environmental and Primary Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Environmental Markets and Primary Health Properties, you can compare the effects of market volatilities on Impax Environmental and Primary Health and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Impax Environmental with a short position of Primary Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and Primary Health.
Diversification Opportunities for Impax Environmental and Primary Health
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Impax and Primary is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets and Primary Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primary Health Properties and Impax Environmental is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Impax Environmental Markets are associated (or correlated) with Primary Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primary Health Properties has no effect on the direction of Impax Environmental i.e., Impax Environmental and Primary Health go up and down completely randomly.
Pair Corralation between Impax Environmental and Primary Health
Assuming the 90 days trading horizon Impax Environmental Markets is expected to generate 0.72 times more return on investment than Primary Health. However, Impax Environmental Markets is 1.38 times less risky than Primary Health. It trades about 0.01 of its potential returns per unit of risk. Primary Health Properties is currently generating about -0.09 per unit of risk. If you would invest 38,350 in Impax Environmental Markets on September 15, 2024 and sell it today you would earn a total of 50.00 from holding Impax Environmental Markets or generate 0.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Impax Environmental Markets vs. Primary Health Properties
Performance |
Timeline |
Impax Environmental |
Primary Health Properties |
Impax Environmental and Primary Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Impax Environmental and Primary Health
The main advantage of trading using opposite Impax Environmental and Primary Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental position performs unexpectedly, Primary Health can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Primary Health will offset losses from the drop in Primary Health's long position.Impax Environmental vs. Catalyst Media Group | Impax Environmental vs. CATLIN GROUP | Impax Environmental vs. Tamburi Investment Partners | Impax Environmental vs. Magnora ASA |
Primary Health vs. Impax Environmental Markets | Primary Health vs. Ecclesiastical Insurance Office | Primary Health vs. Molson Coors Beverage | Primary Health vs. Norman Broadbent Plc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |